United States of America firm Everstrong Capital has denied that the Sh468 billion Nairobi-Mombasa expressway project has been terminated by the government.
The company says that instead of the termination as has been widely reported, the Kenya National Highways Authority (KeNHA) has been asked to restructure the proposal and resubmit it by the National Treasury’s Public-Private Partnership (PPP).
At the same time, the company has now moved to replace Portuguese construction giant Mota-Engil which exited the deal at the last minute. Reports say that Everstrong Capital is seeking to bring on board contractors who include Larsen & Toubro (L&T) of India, Samsung of South Korea, IC Holding from Turkiye, and Italy’s Webuild. The company figures that these multinational firms have bigger balance sheets than Mota-Engil.
Reports further state that Everstrong shall be backed by JP Morgan as the lead arranger for the project’s financing. The company claims that it has already received expressions of interest from development finance institutions (DFIs).
These developments come after the Treasury’s PPP committee distanced itself from suggestions that it had directed KeNHA to expand the existing highway after terminating the expressway’s proposal. Instead, the committee now says that this suggestion was a decision that was taken by KeNHA.
Earlier on, the PPP committee had cited concerns over the exit of Mota-Engil as one of the primary reasons why the project was being shelved.
“When [Everstrong Capital / Usahihi Expressway Limited] went to the development phase, they came back with other contractors to meet the technical capacity but the shareholder to replace Mota-Engil was not there,” the PPP Directorate-General Kefa Seda had told local media.
READ MORE: Why proposed Nairobi-Mombasa Expressway might fail to be constructed
At the same time, the National Treasury was allegedly cautious that Everstrong’s preference for a greenfield venture in which land would need to be purchased along the construction corridor and the estimated cost of around Sh12.9 billion passed to road users in the form of tolls would make the expressway unaffordable.
However, Everstrong has disputed this, and argued that even though the project which it has christened as the Usahihi Expressway has been referred to as ‘greenfield’, it is not the entire route of the highway that will require new parcels of land to be purchased. Apparently, some sections including the Tsavo National Park will use the existing highway.
The firm projects that up to 70 percent of the stretch will require new parcels of land to be acquired while the remaining 30 percent will use the current highway corridor.
